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Saturday, 18 July 2020 06:06

Cloud software firm Blackbaud says it paid ransom to protect customer data Featured

Cloud software firm Blackbaud says it paid ransom to protect customer data Pixabay

American cloud software firm Blackbaud has confessed to having been hit by ransomware and paying a ransom as it was unable to block the attack before its data was exfiltrated, though it managed to prevent the encryption taking place.

The company, which refers to itself as the world’s leading cloud software company powering social good, said in a statement that the data had been exfiltrated, using PowerShell scripts as is the usual practice, in May.

Blackbaud, which reported revenue of US$900,423 (A$1.28 billion) in 2019, has operations in North America including Canada, Europe and the Pacific region. It has hubs in Charleston (South Carolina), Austin (Texas), London and Sydney.

"The cyber criminal did not access credit card information, bank account information, or social security numbers," the Blackbaud statement said.

"Because protecting our customers’ data is our top priority, we paid the cyber criminal’s demand [to obtain] confirmation that the copy they removed had been destroyed.

"Based on the nature of the incident, our research, and third-party (including law enforcement) investigation, we have no reason to believe that any data went beyond the cyber criminal, was or will be misused; or will be disseminated or otherwise made available publicly."

About its customer base, Blackbaud said in its 2019 annual report: "At the end of 2019, we had over 45,000 global customers including non-profits, foundations, companies, education institutions, healthcare organisations and other social good entities.

"There are millions of users of our solutions in more than 100 countries. Our largest single customer accounted for less than 1% of our 2019 consolidated revenue."

It employs 3611 people and on 31 December 2019, Blackbaud had US$634.1 million (A$905.6 million) and US$317.9 million of goodwill and intangible assets respectively. It also had deferred tax assets of US$93.8 million.

The statement added: "This incident did not involve solutions in our public cloud environment (Microsoft Azure, Amazon Web Services), nor did it involve the majority of our self-hosted environment.

"The subset of customers who were part of this incident have been notified and supplied with additional information and resources. We apologise that this happened and will continue to do our very best to supply help and support as we and our customers jointly navigate this cybercrime incident."

Contacted for comment, iTWire's regular commentator on ransomware incidents, Brett Callow, said: "Let’s be be clear about what companies in this situation are actually paying for: a pinky promise from an untrustworthy bad faith actor that the data will be destroyed or has already been destroyed it ('It’s honest-to-goodness gone, Guv’nor. Every copy. You can trust us'.)

"But why would a criminal enterprise destroy data that it may be able to further monetise or use in other ways? The answer is that it probably wouldn’t.

"Companies should keep this in mind when deciding whether or not to pay, especially as doing so helps perpetuate the cycle of cyber crime and ensures that there will be more victims."

Added Callow, who works as a ransomware threat researcher with the New Zealand-headquartered security outfit Emsisoft: "Let’s also be clear that data exfiltration means data breach. Paying the ransom doesn’t change that. Customers and business partners should assume that whatever information the breached company held about them is now in the hands of criminals and [they should] be on high alert for spear phishing, business email compormise scams and other forms of fraudulent activity."

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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